This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
PUBLIC AUTHORITIES -- Competitive Bidding Requirements (for construction of town water system) - Municipal Cooperation (competitive bidding for construction of town water system by public authority)
PUBLIC CONTRACTS -- Award (by public authority for construction of town water system)
WATER IMPROVEMENTS -- Construction (letting of contracts by public authority for town water system)
TOWN LAW §§197, 197-a: If a town, on behalf of a water district, contracts with a water authority for the construction of a water system by a contractor engaged by the authority, the authority must solicit bids in accordance with Town Law §197 for the construction of the town's particular water system as a discrete project. The authority may not solicit bids for individual categories of estimated construction work to be performed in the aggregate for districts in several towns.
You ask whether, pursuant to Town Law §§197 and 197-a, a town, on behalf of a water district, may enter into a contract with a water authority for the construction of a water system by a contractor engaged by the authority under the following circumstances. The contractor would be engaged by the authority after the solicitation of sealed bids for individual categories of construction work, such as installation of various sizes and types of pipe, excavation, paving and remediation. Bid specifications would contain estimates of the types and quantities of work proposed, in the aggregate, over the ensuing fiscal year for the town and for any other towns that may wish to so contract with the authority. Bids would not be solicited, however, for the town's particular water system, as a discrete project.
Town Law §197-a provides, inter alia, that a town board may enter into an agreement with a public water authority which possesses "express reciprocal powers"1 whereby the award of contracts for work performed in connection with the construction of a water supply or distribution system for or on behalf of a water district may be made by the authority. The agreement may contain provisions equitably allocating costs. Section 197-a further provides that if the agreement authorizes the authority to construct public work, the authority "shall be subject to all provisions of law to which a town would be subject in relation to advertising and awarding any such contracts for ... public works." Thus, in accordance with section 197-a, a water authority and town may agree that the authority award contracts for work in connection with the construction of a water district improvement, subject to the procedures for letting such contracts otherwise applicable to the town.
Section 197 of the Town Law sets forth procedures in connection with letting contracts for construction of improvements after the establishment or extension of town water districts. That section provides that, after the town board's determination to establish or extend a district becomes effective, the town board shall require the town engineer, or an engineer employed for that purpose, to prepare and file with the town clerk definite plans and specifications for the improvement, as well as an estimate of the expense and, with the assistance of counsel, a proposed contract or contracts for the execution of the work. The town board then is required to examine the plans, specifications, estimates and contract(s), make such modifications or changes as it deems expedient, and adopt or reject the same.
If the estimated expense exceeds the competitive bidding monetary threshold for contracts for public work set forth in General Municipal Law §103(1)2 , the board "shall invite sealed proposals for furnishing the material and labor necessary by the publication of a notice" at least once in the town's official newspaper or in such other newspaper as the board may deem expedient (Town Law §197). The notice must require all persons who offer to do the work to file a sealed "proposal or offer to do the work", with the appropriate bid security, and must specify a time and place when "proposals" will be received and considered (id.). Further, section 197 provides that there must be at least ten and not more than 30 days between the first publication of the notice and the time when proposals will be received, "during [which] time the plans and specifications for the work shall be exhibited publicly in the office of the town clerk."
Section 197 provides that the town board may award one contract for the entire work or separate contracts for portions thereof. The town board must determine the lowest responsible bidder or bidders and the contracts must be awarded to the "lowest responsible formal bidder therefor", unless the board determines to reject all bids and readvertise.
As described above, section 197 sets forth a detailed, sequential procedure for the letting of contracts for water improvements after the establishment or extension of a town district. Definite plans and specifications must first be drafted, and then filed with the town clerk and available for the inspection of all prospective bidders, after public notice inviting bids for the particular work described in the plans and specifications. We believe the statute clearly contemplates the solicitation of bids for the award of one or more contracts for discrete individual projects (see People ex rel. O'Reilly v Common Council, 189 NY 66; cf. 1983 Opns St Comp No. 83-131, p 165 3; compare 1984 Opns St Comp No. 84-39, p 48). It is our opinion that advertisement for bids and the award of contracts for individual categories of work to be performed in connection with water system construction projects that are not yet specifically determined would not comply with section 197.
Further, we note that articles 12 and 12-A of the Town Law establish a comprehensive legislative scheme evincing an intent to pre-empt local laws relating to the establishment, financing and operation of town improvement districts (see 1992 Opns St Comp No. 92-33, p 84). In addition, Municipal Home Rule Law §10(1)(ii)(d)(3) expressly excludes from the authorization for towns to supersede the Town Law, local laws relating to a special district. Therefore, it is our opinion that the requirements of section 197 and 197-a may not be superseded by local law.
Accordingly, if a town, on behalf of a water district, contracts with a water authority for the construction of a water system by a contractor engaged by the authority, the authority must solicit bids in accordance with Town Law §197 for the construction of the town's particular water system as a discrete project. The authority may not solicit bids for individual categories of estimated construction work to be performed in the aggregate for districts in several towns.
November 2, 2000
Scott Chatfield, Esq., Town Attorney
Town of Schroeppel
1 For purposes of this opinion, we assume the enabling act for the authority in question sets forth "express reciprocal powers" for the authority (see, e. g., Public Authorities Law §§1096, 1154).
2 For purposes of this opinion, we assume the proposed work exceeds that threshold, which is presently $20,000.
3 In O'Reilly, supra, the Court of Appeals annulled a benefit assessment based on an arbitrary division of costs of four improvements bid as a group. The Court noted that the city charter provisions at issue required the cost of each improvement to be fixed by competitive bidding and paid by special assessments against benefited properties. In Opn No. 83-131, supra, we distinguished O'Reilly, supra, and concluded that a town could advertise for combined bids for two or more sewer projects and award a single contract for all the work, so long as the bid specifications were drafted to require the bidders to allocate costs attributable to each project. Unlike the proposal at issue, however, the projects were separately described in the specifications, with costs allocated to each individual project, not by category of work for future projects yet to be defined.